Business license tax gets cool reception

SANTA CRUZ &GT;&GT; A proposed business license tax, floated in the draft county economic vitality strategy, got little support from small business representatives at a Wednesday discussion session organized by the Santa Cruz Chamber of Commerce.

More than 100 people attended the working lunch in the Museum of Art & History courtyard. Attendees sat at tables of 10 and analyzed segments of the strategy drafted under the leadership of county economic development coordinator Barbara Mason.

The 110-page document encompasses key sectors such as agriculture, health and hospitality, emerging sectors such as technology and the arts, sustainable development and needs for housing as well as promoting Santa Cruz.

Chamber chief Bill Tysseling promised to convey the feedback to the county, which is accepting comment until July 7.

A business license tax exists in 62 percent of the state's 58 counties, according to Mason, who said she would do further research if the supervisors want to go that direction.

The strategy, noting 82 percent of jobs countywide are with firms having fewer than 10 employees, suggests a business tax "commensurate with firm size" but does not list dollar amounts.

Fred Gawlick, who runs a business helping employers design retirement plans, asked if the cost to collect the fees would exceed the revenue gained.

"Unless the value proposition is presented, I'm not in favor," he said.

Gary Merrill, manager at a business transition consulting firm, wanted to see the cost-benefit ratio.

Anne Mitchell, a certified public accountant who runs her own business, said the tax would have to be tiered but in the end was skeptical.

Licensing information could benefit county staff trying to assist businesses, said Teresa Thomae who heads the Central Coast Small Business Development Center and said she was "on the fence."

Mason said the funds could be accumulated for a broadband initiative to get faster Internet service or go into a revolving loan fund for small business owners. A loan fund would probably be outsourced, she said.

Lender William Spearman of Santa Cruz Community Credit Union said he sees lot of great ideas from entrepreneurs but not enough planning, budgeting or capital.

Peter Vokos, a Wells Fargo retiree volunteering at SCORE, said the county needs to change the perception that it is not business-friendly.